• USD/MXN declined on Thursday as peso strengthened as traders expecting more news on the tariff front from U.S. President Donald Trump..
• The currency has gained about 1.6% so far this week as traders digest prospects of 25% tariffs to exports to the United States, which might be coming Feb 1.
• On the data front, Mexico’s annual inflation rate eased to its lowest level in nearly four years during the first half of January, strengthening expectations of further rate cuts.
The Mexican peso lost more than 20% of its value last year, marking its largest annual decline against the U.S. dollar in 16 years.
• Immediate resistance is located at 20.629(38.2%fib), any close above will push the pair towards 20.855(23.6%fib).
• Support is seen at 20.263(50%fib) and break below could take the pair towards 20.178(Lower BB).
Recommendation: Good to buy around 20.300, with stop loss of 20.100 and target price of 20.600
